Monthly Archives: June 2013

The role of your insurance broker

At SMART Business Insurance, we utilize our knowledge and experience of the insurance market to understand your needs and risk profile. We can then provide you with guidance on the most appropriate insurance cover for your business.

We take into consideration the insurance coverage, policy wording, cost and reputation of the insurer or underwriter when providing you with a recommendation. Another important part of our role at SMART Business Insurance is to provide you with assistance with CLAIMS.

Services available to businesses from SMART Business Insurance

We will:

  • Provide you with risk management advice, and customize an insurance solution to meet your specific needs.
  • Access the insurance market to provide you with the optimum risk protection strategy at the most economical price.
  • Analyze and recommend a range of insurance policies available to you and provide you with an appropriate risk protection and insurance recommendation.
  • Help you understand policy wordings including the impact of excesses and exclusions.

The ethical standards SMART Business Insurance adhere to:

SMART Business Insurance voluntary adhere to:

  • The insurance Brokers Code of Practice
  • General Insurance Code of Practice

Further more, under common law, we are responsible for holding client interests in a higher regard than our own.

SMART Business Insurance Standards

SMART Business Insurance advisors that provide advice have a minimum of five years business experience and Tier1 certification in Insurance Broker Compliance and/ or a Diploma in Insurance Brokering. Our team has significant cumulative insurance experience plus extensive specific experience in providing insurance solutions for the manufacturing, retail, building, professional services and small businesses.

SMART Business Insurance advisors continually keep upto date with the latest changes in insurance by attending training days held by The Australian & New Zealand Institute of Insurance & Finance (ANZIF). In addition to this, we regularly attend insurer and underwriter product seminars. We are passionate about business insurance!
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General advice Disclaimer

This Blog contains general advice only. It has been prepared without taking into account your particular objectives, financial situation or needs. Before acting on the advice, you should consider the appropriateness of the advice, having regard to your objectives, financial situation and needs.

Smart Business Insurance (this Company) and the Blog authors makes no representations or warranties with respect to this Blog or its contents.

This Company does not warrant that the information on this Blog is accurate, complete or current.

Please click here to for the complete disclaimer details.

What Is Management Liability Insurance?

As a director or manager at an independently/ privately owned company you may be liable for any mismanagement or illegal practices that occur in a department you are in-charge of. Even if you are unaware of activities the negligent actions of one of your subordinates or junior employees can expose you to legal consequences.

What is Management Liability Insurance?

Management Liability Insurance can cover the management of a company in such cases. Defending allegations in court can be costly and time consuming, even if they’re completely unfounded and based on frivolous evidence and imaginary theories.

Why Professional Indemnity Insurance is not enough?

On a fundamental level, a Management Liability Insurance Policy in Australia is focused entirely on the ‘act of running a company or business.’ Unlike, PI (Professional Indemnity) Insurance, Management Liability Insurance has nothing to do with the activities of a company whether it’s owned privately or independently owned.

A PI policy deals with the claims filed by 3rd party companies, partners, supplier and vendors on account of a faulty or less-than-promised (as they would argue) service. The service provided can be as simple as a consultation. But, a  PI policy will NOT protect your business or your personal assets in case there are claims that you as a manager or  director  at the company involved in illegal or unethical management practices and caused losses to other individuals or businesses. This is a completely different kind of exposure and that’s exactly the reason why businesses need Management Liability Insurance.

 What can a management liability insurance policy cover?

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  1. Legal costs involved in defending allegations in the court
  2. Various investigation costs involved in the process
  3. Compensation that you may have to  pay to a third party or civil penalties imposed under the applicable laws

Important Considerations

  1. Claims tend to get bigger as your company grows. If your revenue stream has already crossed the stability threshold, you need to consider buying management liability insurance.
  2. The word ‘management’ in these insurance policies does not refer to directors alone. Junior employees or managers at a company can also be exposed.
  3. The personal wealth of a director, executive or manager may also be exposed in case he or she is held personally liable by a court.
  4. The corporate environment and the various laws applicable in each state are constantly changing. Directors at small, medium and large companies are often unaware of their legal responsibilities.
  5. Being drawn into a controversy is never healthy for the reputation of a company or its directors and senior management. On top of that, the legal costs of defending a claim in court can be very expensive.

Anything from regulatory actions, to negligence on the part of an employee can lead to trouble. Get Management Liability Insurance and protect everyone including yourself against the risks and exposures involved in running a business!

General advice Disclaimer

This Blog contains general advice only. It has been prepared without taking into account your particular objectives, financial situation or needs. Before acting on the advice, you should consider the appropriateness of the advice, having regard to your objectives, financial situation and needs.

Smart Business Insurance (this Company) and the Blog authors makes no representations or warranties with respect to this Blog or its contents.

This Company does not warrant that the information on this Blog is accurate, complete or current.

Please click here to for the complete disclaimer details.

What Is Fidelity Insurance?

An undeniable reality is that white collar crimes at both small and large businesses and even nonprofit organizations in Australiaare on the rise according to the latest industry specific research reports published by reputed bodies such as BDO Kendall and the IH Group. In the corporate sector, these crimes can be collectively looked upon as a sleeping giant, ready to wake up anytime soon and consume one small, medium or large scale organization at a time.

Why, you may need Fidelity Insurance!

A large number of corporate frauds and other malpractices often go undetected for 100s of days before they’re exposed, potentially resulting in significant financial losses for a businesses.

Understanding Fidelity Insurance

Fidelity Insurance, protects your business from financial damages arising due to dishonesty of any person, the organization has employed.

Common Examples of Employee Dishonesty

fidelity-guarantee-insurance

  1. Incorrect invoicing by an employee in order to benefit a third party a vendor, a supplier or the organization itself.
  2. Misuse of funds.
  3. Theft of tangible (hardware, equipment etc.) or intangible (reports, data, customer records etc.) assets of a business by an employee.
  4. Payroll fraud planned and executed by an employee in accounts department or a senior official.
  5. Sales fraud by manipulating the sales system of a company for example siphoning off extra money from customers.
  6. Stock theft.

Note: Such crimes are not covered by general liability insurance or property insurance. Among all these crimes (and more), its embezzlement of funds that’s by far the most common corporate crime in the ‘breach of fidelity’ category in Australia. Accounting errors and financial losses incurred due to a mistake that did not benefit any official or company employee (unless proved otherwise), do not qualify as white collar fidelity-crimes.

How to Deal with Such Frauds

The best way to deal with such frauds is to adopt a holistic approach.

  1. Prevent frauds by ensuring transparency across the organization. Make it a point to fix accountability on various officials, managers and junior employees when they have decision making powers.
  2. Detect frauds by ensuring routine financial and operational audits. Frauds can sometimes go undetected for many years at a stretch!
  3. Respond on time to each detected fraud or breach of fidelity after consulting a legal counsel.

Get Fidelity Insurance

Even when you’ve got a mechanism based on a holistic technique in place, your organization is not completely invulnerable to employee crimes. You should have a fraud risk management strategy with Fidelity Insurance at its heart. Most business owners have the misconception that their ‘business insurance’ policy is more than enough for protecting their interests against all types of financial losses and other damages. Although a handful of business insurance policies do provide fidelity insurance cover it is generally too small to be of any help should the need arise.

General advice Disclaimer

This Blog contains general advice only. It has been prepared without taking into account your particular objectives, financial situation or needs. Before acting on the advice, you should consider the appropriateness of the advice, having regard to your objectives, financial situation and needs.

Smart Business Insurance (this Company) and the Blog authors makes no representations or warranties with respect to this Blog or its contents.

This Company does not warrant that the information on this Blog is accurate, complete or current.

Please click here to for the complete disclaimer details.

Who Needs Professional Indemnity Insurance?

If you’re in the business of offering advice, consultation, assistance in supervising projects or even design expertise, you’re legally required to protect your clients’ interests that are related to the service you provide.

Having a Professional Indemnity (PI) Insurance policy in place in Australia is a mandatory requirement for many professions. It’s an essential requirement for professionals such as:

  1. Medical Practitioners who run their own clinics, or healthcare institutions and offer advice and recommendation to patients.
  2. Surveyors who are entrusted with the task of surveying a construction project.
  3. Mortgage intermediaries who work with banking institutions or lenders and mortgage seekers.
  4. Insurance brokers who work with insurance companies and their customers.
  5. Financial advisers who offer strategic and investment advice to individuals, companies or agencies.
  6. Architects who design or approve a project layout/design.

Professional Indemnity Further, many companies in PR management and advertising have also begun to secure PI policies in order to protect their businesses from claims arising from losses or damages incurred by clients.
Having a PI cover is absolutely necessary in today’s business world but it doesn’t mean you shouldn’t take steps necessary to avoid claims in the first place. Make it a point to consult a lawyer and draft a comprehensive service contract. Look at each clause in a service contract from different legal angles and get 2nd opinions if possible. When both you and your customers have a clear idea of what you offer, it’s possible to reduce the number of potential claims. However, a comprehensive contract alone cannot help you avoid claims on some occasions. That’s when you’ll need a Professional Indemnity Insurance Policy.

How can PI cover help you?

Compensation claims resulting from physical, material or financial injuries can be significant on some occasions. Even if the average revenue per customer is not large, the amount of compensation in the event of a successful claim can really add up depending on the nature of the damages sustained.

To make matters worse, defending these claims in a court of law can be very expensive. You may have to fund significant legal fees to defend a claim made by a disgruntled customer or client, determined to take on your business until his/her losses, whether real or not, are compensated in full.

When you’re covered by a PI policy, you have peace of mind that such claims should not affect your business. Your Insurer should pay for the legal costs in defending in action and in the event you’re held liable for a client’s losses can cover any compensation awarded.

Want more business – get PI Cover

Many professionals are yet to realize the fact that people are now choosing professional companies or individuals who’ve PI cover. Not having Professional Indemnity Insurance can sometimes translate into the loss of a contract. More and more customers are asking service providers to verify their PI cover before entering into a service agreement.- And for good reason. Your customers want to know that you to have enough PI cover so that their interests are protected if something in the process goes wrong.

General advice Disclaimer

This Blog contains general advice only. It has been prepared without taking into account your particular objectives, financial situation or needs. Before acting on the advice, you should consider the appropriateness of the advice, having regard to your objectives, financial situation and needs.

Smart Business Insurance (this Company) and the Blog authors makes no representations or warranties with respect to this Blog or its contents.

This Company does not warrant that the information on this Blog is accurate, complete or current.

Please click here to for the complete disclaimer details.